On completion of parliamentary procedure, the new Law on deposit insurance in banks of Bosnia and Herzegovina was adopted and published in the ‘Official Gazette of Bosnia and Herzegovina’, no. 32/20 from 9 June 2020.

The new Law shall enter into force on 17 June when Law on deposit insurance in banks of Bosnia and Herzegovina (“Official Gazette of Bosnia and Herzegovina”, no. 20/02, 18/05, 100/08, 75/09, and 58/13) shall cease to have effect.

Compared to the current Law, the three important amendments are as follows:

–    Mandatory membership in the deposit insurance programme
This means that no bank licensed by the competent banking agency can remain excluded from the deposit insurance programme, as provided by the Directive 2014/49/EU on deposit guarantee schemes.

–    Moving down the deadline for depositors payout from 90 to 20 days from the day the Member Bank’s license is revoked.
Earlier, the Deposit Insurance Agency of Bosnia and Herzegovina was obliged to start the payment process no later than 60 days from the day the Member Bank’s license is revoked, and all payments for reimbursement of insured deposits had to be completed within 90 days from the day the Member Bank’s license is revoked.
In terms of time frames for depositor payout, the proposed solution provides further compliance with the Directive 2014/49/EU on deposit guarantee schemes.

–    Introducing a new mandate for the Agency by providing the use of funds of the Deposit Insurance Fund for bank resolution

The new Law provides for the Deposit Insurance Fund to be used for a bank resolution, in certain cases defined by this Law and the laws on banks. The Decision on using the funds of the Deposit Insurance Fund shall be issued by the Management Board of the Agency, and under this Law and laws on banks the Agency shall give an opinion on resolution processes to the competent banking agencies that are performing the processes.

In the coming period we hope that, in cooperation with the members of the financial safety net and banks, the Law will be successfully implemented to the satisfaction of depositors, through the protection of their deposits.

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Banja Luka, 6 June 2020